Losing an eviction case is a landlord’s nightmare. One of the most common ways an owner loses an eviction is by “waiver.” The theory of waiver is like the ocean in the movie “Jaws”: seemingly calm waters on the surface, but a monster beneath. Many landlords underestimate a waiver’s potential to sink their eviction case. Keep reading and I’ll show you how to navigate these waters.
Most people in the landlord/tenant business think that a waiver typically refers to when a landlord, who has already served a notice to quit, continues to accept rent from their tenant. The reason why the Courts view this as a waiver is because it’s as if the landlord says to the tenant “I didn’t like what you did, but I forgive you.” As viewed by the Court, that act of “forgiveness” by accepting rent is the waiver. Once a waiver is established, it normally makes the case impossible to win.
A waiver has been defined by our courts as the intentional relinquishment of a known right after knowledge of the facts. The most common example of a waiver, and an equally common pitfall for landlords, is the situation described above where the landlord continues to collect rent after a 3-day, 30-day, or any other notice to quit expires.
However, many landlords fail to realize that the concept of waiver is much broader. First, a waiver does not only apply to nonpayment of rent cases, but to every eviction case, for example a case based on destruction of the property. Second, what about a situation where there has been a material breach of the rental agreement and the landlord accepts rent before he serves a notice to quit?
Imagine this situation: On January 28th you discover that your tenant took a sledgehammer to the walls of his unit, creating substantial destruction. On January 29th, you visit an attorney to discuss an eviction. On February 1st, the tenant sends you the rent check. You deposit the check that day because you think there’s no waiver yet because you have not served a terminating notice. On February 3rd, your attorney serves your tenant with a 3-day notice to cure or quit. The tenant does not cure, nor does he move out. On February 15th your attorney files an unlawful detainer case. On March 1st, the tenant tries to pay rent again, but you reject the rent because you served a notice to quit and you are in the middle of an eviction lawsuit. On March 10th, the tenant’s attorney brings a motion in court to dismiss your lawsuit based on the waiver. The tenant’s attorney wins and your case is dismissed. How could this happen? You did not accept rent after you served the 3-day notice, right? Therefore, there was no waiver, right? Wrong. The waiver in this case occurred on February 1st when you accepted the rent after you had knowledge that the tenant knocked out walls in the unit.
Now, having lost the case, you are several thousands of dollars in the hole in attorney’s fees and court costs and you still have a tenant that destroyed your property.
What’s the solution to this problem? Have your attorney draft an anti-waiver provision in all your rental agreements. It should read something like this: “Owner’s acceptance of rent with knowledge of any default or breach of any term of this Agreement by Tenant shall not constitute a waiver of that default or breach, or any subsequent default or breach. Failure to require compliance or to exercise any right shall not be construed as a waiver by Owner of said term, condition, and/or right, and shall not affect the validity or enforceability of any other provision of this Agreement.” (This clause is included in AOA’s rental agreement.)
Dealing with evictions is one of the hardest parts of being a landlord, especially in rent control jurisdictions where tenant activist groups and attorneys outnumber the landlords in resources and people 10 to 1. The rule of waiver is complicated and harsh, but does have some narrow exceptions that attorneys can use on your behalf. But, for the sake of protecting your property (and your wallet), it is best to avoid accidentally waiving your rights from the beginning.
Andrew B. Kavros is with the Law Offices of Thomas A. Nitti. For more information, call (310) 393-1524.